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Jetta production cost in 2002 and 2003 was 14,000 Euro per Jetta. Jetta sold in US...

Jetta production cost in 2002 and 2003 was 14,000 Euro per Jetta. Jetta sold in US at $15,000 in 2002 and 2003. Forward hedge exchange rate was 1 $/Euro in 2003. Rate without hedge (i.e. market exchange rate) was 1.25$/Euro in 2003. If 12,000 Jetta were sold in US, in 2003, by 60% forward hedge and 40% not hedged. What would be profits or loss from sales of 12,000 Jetta in US?  

Loss of 2.4 million Euro.

Profit of 1.8 million Euro.

Loss of 2.8 million Euro

Profit of 1.2 million Euro.

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jeff jeffy answered 5 months ago
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